Sky-high fares slide as airlines launch price war

Feb 20, 2013, 01.03AM ISTTNN[ Manju V ]

Air fares crashed on Tuesday as airlines rolled out never-before offers to lure passengers and fill empty seats.

MUMBAI: There's some respite in the offing if you are planning to fly this holiday season. Air fares crashed on Tuesday as airlines rolled out never-before offers to lure passengers and fill empty seats. Jet Airways kicked off the price war with a six-day sale of 20 lakh seats over 450 flights across 57 domestic destinations. Go Air, IndiGo and Spice Jet also followed suit with unannounced cuts.

Under the offer, a Rs 8,000 one-way ticket from Mumbai to Delhi would cost just Rs 2,850. Similar discounts on other sectors are a welcome relief for passengers who have seen fares soar for two years.

The offers, at the lowest possible base fare of Rs 1, have been sweetened even more this year. Unlike in the past, passengers can now book low offers up to December 31. Till last year, such offers were available up to, say, March 31 when the lean season ended, or at the most till July.

Sudheer Raghavan, chief commercial officer, Jet Airways, said the offer will allow passengers to plan and schedule their travel much in advance, especially during the holiday season, while benefiting from the special fares.

The Jet offer comes in four slabs based on distance. For instance, one-way fares from Mumbai to Ahmedabad, Mangalore, Hyderabad, Nagpur or Bhopal would be Rs, 2,250, taxes included. It would be Rs 3,300 to Bengaluru, Raipur, Coimbatore or Jaipur; Rs 2,850 to Chandigarh, Delhi, Bhubaneswar or Visakhapatnam; and Rs 3,800 to Kolkata.

Similarly, the fare from Delhi to Jammu, Srinagar and Varanasi would be Rs 2,250; Rs 2,850 to Ahmedabad, Patna or Raipur; Rs 3,300 to Bengaluru, Kolkata, Hyderabad, Ranchi or Pune; and Rs 3,800 to Chennai, Bengaluru or Guwahati.

Not all bargain hunters may be lucky though as the inventory is limited, and it is not known how many cheap seats are being released per flight. "Last year Jet flew around 16 million domestic passengers with a load factor in the low 70s. Which implies that the total seats on offer were around 21 million. The ongoing Jet offer is a limited period campaign with around 2 million seats on offer. That translates to around 10% of Jet's total capacity. This will help stimulate the market," said Amber Dubey, aviation analyst at global consultancy firm KPMG.

"Passengers loads are down and this being off season, the airline seems to have decided to increase their sales revenue. Also, they have probably decided to cash in on the forthcoming holiday season, which will come in May,'' said Jay Bhatia, chairman, western region, Travel Agents Association of India.

Dubey also said with Kingfisher grounded, airlines would be careful of not pricing tickets below cost for a sustained period and that lenders and the DGCA would be watching.